Question

ln looking at the Microsoft break up in 2000.When does a business become to big that they start to infringe upon antitrust laws.Compare Microsoft of 2000 to AT&T and CVS health. Discuss the Pros and Cons of big companies.What changes would you recommend in current regulation?

Answer 1

United States v. Microsoft Corporation:

When a company illegally starts gaining a monopoly in the market, it is a sign that it is becoming too big that it has almost turned into the market itself. The Sherman Antitrust Act of 1890 and the US Courts of Appeals for the D. C. Circuit ruled that Microsoft’s actions were illegal in the United States vs Microsoft Corporation , 253 F.3d 34 (D.C. Cir. 2001). When a company becomes too big, it acquires the related products, operating system and browser ,in this case. Thus, the company acquires an advantage over the rest of the market. This is when they infringe upon antitrust laws

Discussion the Pros and cons of big companies:  

Advantages	Disadvantages
Multiple revenue streams at disposal- A big company will always have different products and services. Thus, profits earned from one source can be set off against losses occurring from other sources. For example, Microsoft making operating system and browser	Complex structure: The structures of the business will be complex, because of a large number of resources, departments, projects and teams. Multiple organizational structures and steps will have to be followed. It will be rather difficult to control it.
Brand recognition: Large businesses will have often greater awareness, thanks to more publicity.	Greater and rigorous compliance requirements: A large company will have to adhere to a large number of rigorous rules and regulations
More attractive compensation packages: Large companies can attract better workers, because they have a lot of money at disposal which they can spend.	More taxes: It will have to pay high taxes and even taxed twice
Opportunities for Economies of Scale: Companies can get discounts for large purchases. Thus they can reduce the costs and maximize profits.	Greater corporate social responsibility: A big company will be required to be more responsible in its actions. it has to be more socially responsible while doing the businesses
Stock exchange listing: Most big companies are listed in the stock exchange. There are minimum requirements for getting a listing in the stock exchange.	Loss of control: The founders of the company will lose control as a result of being publicly listed.

The following are some of the changes required in the current regulations

· The government should make sure that they do not overregulate the taxation rules and take initiatives to make them less complex. Excessive taxation should be avoided as they do not let businesses prosper.

· The government regulations should not be prone to regulatory capture (regulatory authorities being influenced by industries).

· The delay in approval of certain products costs businesses dearly. The government should do the necessary to make sure that the regulations do not lead to delays which will affect the businesses dearly.

· The government should review the regulations and restrictions to entry and make sure they are fair and equitable.